The International Accounting Standards Board has clarified the accounting treatment of embedded derivatives for entities that use the reclassification amendment issued in October 2008. The amendment allows entities to reclassify particular financial instruments out of the 'at fair value through profit or loss' category in specific circumstances. The amendments to IFRIC 9 and IAS 39 issued today clarify that on reclassification, all embedded derivatives have to be assessed and, if necessary, separately accounted for in financial statements. The amendments form part of the IASB's response to views received in the roundtable discussions organised jointly with the US Financial Accounting Standards Board in November and December 2008. Participants asked the IASB to clarify the accounting treatment of embedded derivatives in the reclassification amendments in order to avoid divergence in practice. The amendments set out in Embedded Derivatives apply retrospectively and must be applied for annual periods ending on or after 30 June 2009.